Rich Kids Graduate From College, Poor Kids Don’t

Getting a college education increases a person's income earning potential. In 2013, Americans whose households made over $108,650 in 2012 were more than eight times more likely to have graduated from a bachelor’s-degree program than Americans whose households made less than $34,160. Go back to 1970, and the higher-income group was five times more likely to have earned a bachelor's degree. The trend indicates that a college education has become more and more important to financial health and success. The problem is that the high cost of education makes finishing a bachelor's degree much harder for the nation's poorest students.

April 6, 2015

Getting a college education increases a person’s income earning potential. In 2013, Americans whose households made over $108,650 in 2012 were more than eight times more likely to have graduated from a bachelor’s-degree program than Americans whose households made less than $34,160. Go back to 1970, and the higher-income group was five times more likely to have earned a bachelor’s degree. The trend indicates that a college education has become more and more important to financial health and success. The problem is that the high cost of education makes finishing a bachelor’s degree much harder for the nation’s poorest students.

Do You Know What You're Worth?

The good news is that more economically disadvantaged students are entering college. According to a Pell Institute report on higher education, in 1970 only 28 percent of Americans in the lowest income range mentioned above and between the ages of 18 to 24 attended college. By 2012, that number increased to 45 percent. This is less than half, but an improvement. The problem seems to be, however, that they are not graduating with a bachelor’s degree.

Equity Indicators

The Pell Institute report found six indicators of inequity that contribute to lack of attainment of a bachelor’s degree by the less wealthy.

1. Who enrolls in postsecondary education?

As we’ve discussed above, rich kids are more likely to enroll. This may be for the obvious reason that higher education is expensive, and wealthier parents are more likely to be able to help pay tuition.

2. What type of postsecondary educational institution do students attend?

Lower-income students are more likely to attend either for-profit or public two-year institutions; higher income students are more likely to attend doctoral granting institutions. If the lower-income students graduate with an associate’s degree, they may or may not choose to enroll as an upper-division student at a four-year university in order to attain a bachelor’s degree.

3. Does financial aid eliminate the financial barriers to paying college costs?

The report found that average tuition and fees at colleges and universities in the U.S. more than doubled in constant dollars since 1970, rising from $9,625 in 1970 to $20,234 to 2012-13. Relative to the average cost of attendance, the maximum Pell Grant peaked in 1975 when the maximum Pell Grant covered two-thirds (67 percent) of average costs. The maximum Pell Grant covered only 27 percent of costs in 2012, the lowest percentage since 1970.

So financial aid is less and less helpful, therefore making a college education less and less attainable for the less wealthy.

4. How do students in the United States pay for college?

In addition to the fact that tuition is on the rise, parents and students pay a greater percentage of college costs than they used to. In 1977, students and families paid 33 percent of college costs out-of-pocket. In 2012, this number had increased to 49 percent.

5. How does bachelor’s degree attainment vary by family income?

The report looked at dependent students who attained (or did not attain) a bachelor’s degree by age 24. The trend is that the gap continues to widen, and less wealthy kids are less likely to attain that bachelor’s degree.

6. How do educational attainment rates in the US compare with rates in other nations?

The gist of this section of the report is that in other countries, more people across the wealth spectrum are attaining tertiary degrees, but in the United States, the less wealthy are less likely to succeed in doing so.

This is a problem for our nation because, as The Pell Institute points out, there are numerous and well-documented benefits of a college degree. People with college degrees tend to experience higher earnings, lower unemployment and poverty, better working conditions, longer lives, and better health. Society as a whole benefits when more individuals complete higher levels of education, because the tax base increases and reliance on social welfare programs declines. Civic and political engagement increases when the public is better educated. Making a bachelor’s degree affordable seems to be worthy goal for everybody.

Tell Us What You Think

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This is a good and enlightening article, pointing out to me something that was not obvious to me before I read it. I think the article is more so to raise awareness of a trend, rather than to propose any kind of solution. I feel that wealth is matter of mentality. If a person were poor, and you give that person a million dollars, that person will still end up being poor eventually, and probably sooner than one would think it will happen. I am not sure whether the inability to complete college is based on how much money one… Read more »

High school counseling is much better in school districts where the wealthy live. Wealthier states tend to fund their public colleges at a higher rate. The result –many poor people in poor states are being left behind. This will hurt everyone in the United States because we all need an innovative workforce and active citizens. So let’s improve high school counseling everywhere, and let’s steer state money to public higher education now.